{"id":10636,"date":"2022-07-06T09:40:50","date_gmt":"2022-07-06T14:40:50","guid":{"rendered":"https:\/\/blogs.law.columbia.edu\/climatechange\/?p=10636"},"modified":"2022-07-06T09:42:02","modified_gmt":"2022-07-06T14:42:02","slug":"the-new-york-department-of-environmental-conservation-denies-an-air-quality-permit-to-a-cryptocurrency-mining-facility-citing-sabin-center-white-paper","status":"publish","type":"post","link":"https:\/\/blogs.law.columbia.edu\/climatechange\/2022\/07\/06\/the-new-york-department-of-environmental-conservation-denies-an-air-quality-permit-to-a-cryptocurrency-mining-facility-citing-sabin-center-white-paper\/","title":{"rendered":"The New York Department of Environmental Conservation Denies an Air Quality Permit to a Cryptocurrency Mining Facility, Citing Sabin Center White Paper"},"content":{"rendered":"
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By Jacob Elkin<\/em><\/p>\n

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Credit: http:\/\/www.quotecatalog.com\/<\/figcaption><\/figure>\n

On June 30, 2022, the New York Department of Environmental Conservation denied<\/a> Greenidge Generation LLC\u2019s application to renew a Title V air quality permit for the Greenidge Generating Station. The facility, previously permitted as a natural gas-fired \u201cpeaker\u201d plant, has recently ramped up its power generation to provide behind-the-meter power to Greenidge\u2019s proof-of-work cryptocurrency mining operations.<\/p>\n

The denial cites a Sabin Center white paper<\/a> published in March 2022 that argues that the New York Executive Branch has the legal authority to implement a moratorium on the permitting of fossil fuel power plants that are providing behind-the-meter energy to proof-of-work cryptocurrency miners. As the paper discusses in more detail, proof-of-work cryptocurrency mining requires significant energy consumption and thus produces large quantities of greenhouse gas (GHG) emissions. Researchers have recently estimated<\/a> that Bitcoin mining is responsible for 65.4 megatonnes of carbon dioxide emissions per year. Other estimates<\/a> put Bitcoin\u2019s annualized carbon footprint at 72.05 megatonnes of carbon dioxide, comparable with that of Greece, with a single Bitcoin transaction generating 805.77 kilograms of carbon dioxide, equivalent to the emissions generated by 1,785,864 VISA transactions.<\/p>\n

In order to power such operations, a trend<\/a> has arisen of former coal power plants transitioning to natural gas generation to deliver behind-the-meter power to mining facilities. Greenidge Generation is one such facility, operating as a coal-fired power plant in the 1930\u2019s before ceasing operations in 2011, then receiving a new permit to restart operations as a natural gas-fired plant in 2016. When applying for that 2016 permit, Greenidge indicated that it would operate solely to provide power to the grid in a \u201cpeaking\u201d capacity, but since 2020, Greenidge has begun utilizing the energy it produces to power an on-site cryptocurrency mining operation. As a result of this change in function, Greenidge\u2019s GHG emissions have increased considerably<\/a>, with Greenidge predicting<\/a> its emissions to continue to increase going forward. Greenidge\u2019s permit renewal application has thus drawn a significant amount of attention state-<\/a> and nation-wide<\/a>.<\/p>\n

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DEC\u2019s denial rests primarily on the permit application\u2019s incompatibility with the climate goals enshrined in New York\u2019s Climate Leadership and Community Protection Act (CLCPA). In a separate statement<\/a> on the denial, DEC summarized the decision as follows:<\/p>\n

“Based on DEC’s review of the specific facts and circumstances presented, this natural gas-fired facility’s continued operations would be inconsistent with the statewide greenhouse gas emission limits established in the Climate Act. Among the factors considered was the dramatic increase in greenhouse gas emissions from the facility since the passage of the Climate Act, driven by the change in the primary purpose of its operations. Rather than solely providing energy to the state’s electricity grid, the power plant now primarily provides energy behind-the-meter to support the demands of Greenidge’s energy-intensive proof of work cryptocurrency mining operations.”<\/p>\n

While much of DEC\u2019s denial letter pertains to the specifics of Greenidge\u2019s permit application and facility emissions, the letter also contains several key takeaways pertaining to the meaning and effect of the CLCPA more broadly. These takeaways primarily apply to Section 7(2) of the CLCPA<\/a>, which provides that all state agencies must consider whether permit decisions and other administrative approvals are inconsistent with or will interfere with statewide GHG emissions limits and, where such decisions are deemed inconsistent, provide a detailed statement of justification for the approval and require alternatives or emissions mitigation measures for the project. The main takeaways from the denial are as follows.<\/p>\n